Deutsche Bank's co-CEO Anshu Jain said the bank had made enormous progress on its core tier-one capital ratio.

Credit Suisse also cited the improvement in the capital ratio for a gain in share prices on Thursday.

"We've made enormous progress I have to say," Anshu Jain told CNBC in Frankfurt on Thursday. Under Basel III rules, banks now have to hold more capital, and Deutsche appear to be making headway as its core tier-one ratio rose to 8 percent at the end of 2012, from under 6 percent at the end of 2011.

"None of our competitors has added that much organic capital and really we had to pull every lever, in terms of asset sales, retained earnings, all that together. That's an achievement we are very proud of. Equally we have provided guidance that we are now aiming to hit 8.5 percent by the first quarter of 2013."

In a note on Monday, Brian Reynolds, chief market strategist at Rosenblatt Securities, said Deutsche Bank might have improved its capital ratio by selling low quality assets as part of a collateralized debt obligation (CDO), a type of asset-backed security that gained notoriety during the financial crisis in 2008. Last week, the Frankfurter Allgemeine Zeitung, a German newspaper, reported that Deutsche Bank had recently launched a CDO worth $8.7 billion,citing sources it did not identify.

"We are confident that regulators never figured on Deutsche improving their capital ratios by 'selling their assets' by stuffing them into CDOs, an asset class that has been virtually dead for five years," said Reynolds, in the note.

At its annual press conference following the results, co-CEO Anshu Jain was asked to confirm whether the bank had issued a CDO in order to improve its capital ratio.

Jain replied: "The deal to which I think you are referring, is one where we chose to de-risk our existing assets, to be sold to a highly sophisticated hedge fund, purpose-built to purchase investments like these."

"And the structure that was used, was, I believe, a CDO."

Deutsche Bank's net revenues in the fourth quarter were 7.9 billion euros ($10.7 billion), but the company took multiple writedowns, including 1.9 billion euros of goodwill charges and 1 billion euros of litigation charges.The company said it would pay a cash dividend of 0.75 euros per share.

Over the past year, Germany's largest bank has been affected by stricter banking regulations and restructuring costs. In 2012, the bank said it would not ask its shareholders for new capital but would instead shrink its balance sheet and cut costs to meet higher capital requirements.

The bank said it would aim for 4.5 billion euros in annual savings by 2015 to survive in a less profitable investment banking world.

Last summer, the bank said that it would cut 1,900 jobs in order to cut costs by about 3 billion euros ($3.67 billion).